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BOE injects £50 billion into economy

BOE injects £50 billion into economy

Category: Economy

Updated: 09/02/2012
First Published: 09/02/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The Bank of England has injected another £50 billion into the UK economy as part of its programme of quantitative easing (QE).

Interest rates have also been frozen at 0.5%, a level which has remained in place since March 2009.

It means that rates will have remained at the record low for three years by the time the Bank's rate setting group, the Monetary Policy Committee, meets in March.

The QE initiative works by the Bank of England buying up bonds from the Government and the banks, with the end result being that funds trickle down into consumer and business lending.

The size of the Bank's QE programme is now £325 billion, although some experts thought today's injection would be £75 billion.

The British Chambers of Commerce (BCC) welcomed the injection of funds.

"Although the benefits are not immediately obvious to the business community, quantitative easing plays a key role in strengthening the financial system and stabilising the wider economy," said David Kern, chief economist at the BCC.

"In the face of difficult domestic circumstances and the ongoing crisis in the eurozone, the decision was a sensible one."

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